According to research by iLocus, the carrier VoIP equipment market, softswitch and media gateways generated combined revenues of $2.2 billion last year, writes Puneet Mehrotra.

VoIP short for Voice over Internet Protocol is coming on fast in India. A growing IT services and BPO sector, followed by banking and financial services, logistics and manufacturing enterprises combined with end use consumers of IP telephony and India has a growing VoIP market which could touch almost 60-110 billion minutes if things work out right.

The Growing VoIP Tribe

According to a report by iLocus there were estimated 1,079 billion minutes of VoIP traffic carried by service providers worldwide last year. Of these minutes, 382.3 billion was local call volume, 614.4 billion was national long distance (NLD) call volume, and 82.6 billion was the international long distance (ILD) call volume. According to another report in India about 70 per cent of all long distance calls would be made through Internet telephony or Voice over Internet Protocol.

Considering the growing tribe of VoIP users companies such as Phonewala.com, the recent entrant Tringme.com and calling card company Worldphone are growing too.

Talk more pay less

The growth mantra in telecom has always been volumes whether in hardware or service. Same is the case with VoIP. Consider the offerings by one of the oldest players in the industry Net4 through their VoIP product Phonewala. For a SME unlimited calls to US/Canada @ Rs 3999 per month may make sense. Or a home user 500 minutes of calls to US/UK/Canada for Rs 599 only make it less around Rs.1.20 paisa per minute. On the other hand Tringme.com takes forward the Push and Talk concept. Says Tringme.com's founder Yusuf Motiwala says "TringMe's core premise was to provide a simple click-and-call telephony service. We have and will continue to add capabilities around this seemingly simple concept." Tringme.com also lets the user place widgets on any website - Blogger, eBay, Facebook, Myspace, Typepad, wordpress etc

The growth in VoIP companies is evident from the fact Phonewala's promoter Net4 recently got listed at BSE. While Phonewala has been in the market for a few years, Tringme.com is already embarking onto expansion plans. Says Yusuf Motiwala "We are soon going to add two key products in our portfolio, one of which will be in private beta next week and following that will be a first of it's own kind video product."

The Industry boom

Consider the fact that CISCO alone has already shipped in excess of 200,000 IP phones to India. Also it recently set up a pilot facility through their global manufacturing partner Foxconn for the production of internet protocol (IP) phones in Chennai. CISCO chairman John Chambers had recently reportedly said "The Enterprise IP Telephony market has been growing at a very strong pace for Cisco."

According to research by iLocus the carrier VoIP equipment market, softswitch and media gateways generated combined revenues of $2.2 billion last year, which represents about 24 percent growth over previous year. Sonus, UTStarcom, Cisco and Comverse platforms emerged as leading traffic handlers in various different categories.

The Government angle

Perhaps the biggest misconception about VoIP is that it is illegal in India. Says Yusuf "It is legal to use VoIP in India. TRAI has recently recommended removing earlier restrictions by appropriate licensing fees or service tax as captured in the following document (TRAI recommendations)." According to the TRAI document by 2010 India will have 20 million broadband users. This may give VoIP just get the right boost it requires.